Consumers and the Smart Grid

Energy Management

The advantages and disadvantages of the smart grid system

Rolling out the smart grid should help keep the lights on in Britain, reducing the threat of blackouts while hopefully providing value for money for the consumers.

Aside from helping the country transition to a low carbon energy industry, it will also benefit consumers through a variety of means that we look at in detail below. Obviously rolling out the smart grid also raises a few areas of contention for consumers and we also look at these.

Advantages of the smart grid for the customer

Empowering the consumer

The smart grid will give the consumer the potential to save money; however this is very much dependant on the consumer acting on the information available to them. For example, one of the potential benefits of the smart grid is the time of use tariff, which will charge customers less for using electricity at off-peak times and more at peak times (like a much more accurafte Economy 7 tariff).

Obviously, while this has the potential to allow the consumer to change their energy usage habits to ensure they pay less for on their bills. It also means that they may be charged more if they use electricity during peak times. This ties in with real-time electricity consumption.

Real-time electricity consumption

Perhaps the main advantage that the smart grid will offer the consumer is an increased responsibility over their electrical usage. Real-time consumption will display up-to-the-minute information on how much electricity is being used and at what price.

The end of estimated bills

The smart grid allows the energy companies to see energy usage from individual houses in real time if they so require, so they should be able to bill exactly the right amount each month. No more overpaying during the summer and getting whacked with sudden additional payments when they finally get actual energy usage details from the meter.

Electrical reliability/swifter power outage detection

Due to the increase of data available within the smart grid, power outages, or blackouts, can be predicted and sometimes even prevented altogether. The self-healing capabilities of the grid allow problems to quickly be fixed, potentially even before customers are even aware of the issue. This obviously creates a more reliable electricity network that should mean power failures become a thing of the past.

Lower carbon footprint

The smart grid – through initiatives like the time of usage tariff – should help lower peak energy demand, meaning less generating capacity will be needed. This should result in lower carbon emissions since fewer old fossil fuel electricity generators are required to be switched on.

The improved integration of renewables inside the grid also helps minimise carbon emission within the UK’s electrical generation mix.

Remotely monitored usage

The introduction of the smart meter within the smart grid system means that utility companies no longer have to pay the high admin fees involved with checking meter readings. This is because information is passed from the home’s smart meter, along the 2-way dialog communications system and into the smart grid’s database. The removal of these admin fees mean that the savings the companies make may be passed onto the consumer to a certain extent.

Renewables integration

At present, the National Grid is not suited to high levels of electricity being produced by renewable energy sources. The reason for this is the complexity in balancing supply and demand, which was hard enough when they could predict when power stations were going to be off and online.

Think about the added complexity that 1 million homes having solar PV have added to our energy mix. We now have millions of micro power stations that are all producing unpredictable amounts of energy.

The introduction of the smart grid allows the increased integration of renewables energy in to our energy mix. This will reduce our dependence on imported fossil fuels, relieving us from these volatile markets. Not only will it save the consumer money, but also lower the carbon footprint of the grid and therefore consumers are safe in the knowledge that the electricity that they use is as green as can be and that it is being produced here in the UK, with no need to import fuels.

Disadvantages for the consumer resulting from the implementation of the smart grid

Cost of installation passed on

The upfront capital cost of installing smart meters nationwide is quite frightening, with reports coming from governmental sources suggesting that it may be close to £12billion. This has ignited public opinion that the money required for this revolutionary smart grid will come from the consumer. However this may not necessarily be the case, as utility companies will pay for the technological improvements and recoup the costs through the improvements that they bring.

Lack of electrical pricing clarity

The smart grid brings with it the potential for utility companies to alter electricity prices through real-time consumption information. One of the key concepts of the smart grid is that it will aim to level off the peaks and troughs in electricity demand. The way that this will be achieved is to alter unit prices through time of use tariffs.

Energy companies will increase the price of electricity during peak times while decreasing it during periods of reduced demand. However, while previously people have been comfortable with how much they are paying, whether through a standard tariff or Economy 7, the smart grid does add complexity to bills.

Loss of smart appliance control

Many people have read about the potential loss of control of smart appliances. This will be in the case of utility companies remotely switching off your smart freezer during periods of peak demand in order to reduce pressure on the grid.

Now, while neither you nor your freezer will be able to tell, for many it represents a step in the wrong direction towards a more regulated and controlled state. However, if switching off your smart appliances remotely means that you are using less electricity during peak times and therefore saving money, then surely this could also be looked at as an advantage.

Smart meter health impacts

Some consumers may be apprehensive over the installations of smart meters outside their homes in light of some media coverage of potential health impacts. The worry is that the smart meter, through their wireless communications with the grid, will emit harmful radiation that could cause cancer. However we can categorically reassure people that there is no information nor scientific research that suggests smart meters can be harmful to human health.